Mixed Trends in 2024 German Corporate Climate Protection Investments

In 2024, German companies displayed a nuanced approach to climate protection investments, with notable shifts in participation and spending. According to KfW Research, the total climate protection investment by German businesses amounted to 80 billion euros, marking a 6% decline from 2023 but still above 2022’s 75 billion euros. Inflation-adjusted investments decreased by approximately 8%, slightly exceeding the general downturn in overall private sector investment.

While 86% of large companies engaged in climate protection projects—the highest level recorded—their aggregated spending fell by 19% to 42 billion euros, causing the share of climate-related investments to drop from 18% to 15.8%. Medium-sized enterprises nearly doubled their participation rate, with roughly 15% investing in climate initiatives, driving an 8% inflation-adjusted increase to 38 billion euros. However, average investment per medium-sized company declined from 146,000 euros to 91,000 euros.

Energy efficiency for existing buildings saw a notable surge, with investments rising 63% to 13 billion euros. Despite this progress, KfW chief economist Dirk Schumacher highlighted a shifting corporate focus towards other priorities, influenced partly by waning customer demand for climate projects. Companies have voiced the need for government support, particularly in reducing electricity costs, to sustain and grow climate protection investments.

Complementing these trends, the plastics industry underscored a readiness to invest, contingent on favorable reforms. A survey from the Industrial Association of Plastic Packaging found that 91% of companies are willing to invest if government actions reduce energy prices, cut bureaucratic barriers, and improve regulatory conditions, which they currently rate as 'insufficient'.

These developments illustrate both commitment and caution among German firms regarding climate investments amid economic and regulatory challenges, signaling a complex investment landscape heading into 2025.